Dr. Michael Burry of ‘The Big Short‘ fame and legendary investor sounds off on several issues recently. Namely the closure of the global economy and it’s impact due to the COVID 19 virus. I say ‘Doctor’ Michael Burry because many people don’t realize Mike is a physician. He earned an M.D. from the Vanderbilt University School of Medicine. Despite being one of the best investors of the last twenty years, Burry has kept his license as a physician active with the Medical Board of California. He’s been very busy on Twitter lately and wrote a lengthy email to Bloomberg discussing his views on the nationwide shut-down. Dr. Michael Burry is not shy about voicing his concern about the latest global events.
The Next Big Short
Dr. Michael Burry has kept a low profile since he nailed the housing crisis and great recession in 2008. His mortgage bets turned into a book by author Michael Lewis. Actor Christian Bale played Burry in the movie based on the book titled, “The Big Short.” Last year Burry made headlines as he shared an unpopular view that ETF’s and passive investment products were in a bubble and headed for a crash. He said it wasn’t a matter of “if,” just a matter of “when” the passive investing bubble would explode. Everyone would attempt to run out of the movie theater at once. Unable to sell their shares of exchange-traded funds at one time, prices will plummet. He mentioned in an email to Bloomberg that the pandemic has the potential to unwind the passive investment bubble. He was primarily concerned about the effects on society as a whole during this pandemic.
Concerns on the Shutdown
His latest concern is the mandatory shut-down across the globe and throughout the United States. Burry wrote an email to Bloomberg, saying, “Universal stay-at-home is the most devastating economic force in modern history.” Burry added, “and it’s man-made. It very suddenly reverses the gains of underprivileged groups, kills and creates drug addicts, beats and terrorizes women and children in violent now-jobless households, and more. It bleeds deep anguish and suicide.”
Prudent plan: 1) Standardize on chloroquine and azithromycin -cheap and available 2) Sick and elderly voluntarily shelter in place. 3) Americans lead their normal lives with extra hand washing and special care if around elderly. Saving the economy means life, not murder.#COVID19— michaeljburry (@michaeljburry) March 25, 2020
Burry began speaking out and tweeting because of how strongly he feels the economic shut-down to stop the virus is worse than the virus itself. He adds that it’s “Unconscionable” to see job losses of over 10 million Americans in the last two weeks. His biggest beef is with the medical policymakers. Burry says the coronavirus infections could be managed through common-sense measures like increased testing and hand washing, without forcing everyone home from their jobs. He also cites the potential for treatment using chloroquine and hydroxychloroquine, which the medical and political groups have been slow to pursue.
Regrettable but understandable that historic economic consequences are completely lost on lifelong government technocrats like Dr. Fauci, but this…not foreseeing this is unforgivable. At what cost prevention? #endthelockdown https://t.co/O1qFMhpYRN https://t.co/LYRbUkNIJn— michaeljburry (@michaeljburry) April 4, 2020
The shut down is not good for anyone – only 30% of whites and Asians can work from home, but it’s far worse for blacks and Latinos. Hard-earned job and wage gains are evaporating fastest for the already-underprivileged. At what cost prevention? #JobsReporthttps://t.co/cT06Z9zLeY— michaeljburry (@michaeljburry) April 4, 2020
Unconscionable. Let’s put today’s horrific jobless claims in perspective. This is not the virus. This is the response to the virus killing the US and global economy, with all accompanying human tragedy. I present America’s initial jobless claims over the decades. #COVID19 pic.twitter.com/f2Lhz43rPh— michaeljburry (@michaeljburry) April 2, 2020
In his emailed response to Bloomberg on the U.S. policy response to the virus, he adds that “nothing is more important now than loans to small and mid-sized businesses, and the U.S. Treasury, backed by the Fed, is providing that liquidity, which is vital.” It’s now a rather unpopular view to go against the stay-at-home policies to stop the spread of the virus. Dr. Michael Burry seems to have reason to believe the economic realities later this year will be much worse than people expect.